Mining sector slumps but there is hope

 

The mining sector slumped slightly in June but economists are optimistic that the sector will still contribute positively to the second quarter GDP.

 

The sector has picked up significantly in recent months. Mining production increased by 3.6% year-on-year in May after rising 1.6% in April‚ surprising many economists. In June‚ however‚ mining production decreased marginally by 0.8% year-on-year.

Seasonally adjusted mining production increased by 0.6% in the second quarter of 2017 compared with the first quarter of 2017.

The biggest positive contributor was manganese ore‚ which contributed 1.1 percentage points while PGMs detracted 1.7 percentage points.

FNB economist Mamello Matikinca expected the mining sector to have moderated somewhat on the back of softer commodity prices.

Investec economist Kamilla Kaplan said last week: “Our calculations show that even if June’s month-on-month seasonally adjusted outcomes are 0.0% or even moderately negative‚ the sectors will still avoid a quarterly fall in the second quarter of 2017.”

Kaplan expected mining to fall by 1.7% year-on-year.

Mining is a R230bn industry and contributes 7.48% of GDP.

The manufacturing figures expected later today should provide an indication of whether SA has steered out of the recession.

by Sunita Menon-BusinessLIVE

 

Leave a Reply